Venture Partner May Stall Sale of Fluor’s St. Joe Gold Division

In a move that may stall Fluor Corp.’s $500-million sale of its 90% interest in St. Joe Gold, a venture partner in the mining concern is contending it has a prior right to buy a Northern California operation it owns with St. Joe.

Yuba Natural Resources, a San Diego-based company, is the joint venture partner with St. Joe Gold’s Placer Service Corp. subsidiary in a gold dredging operation along the Yuba River, which flows southwest from the Sierra until joining the Feather River about 30 miles north of Sacramento, near Marysville and Yuba City.

Yuba Natural Resources’ president, Peter Jensen, said company attorneys have said that the sale of St. Joe Gold, which owns two-thirds of the joint venture, is tantamount to selling the dredging operation and thus triggers a clause giving Yuba “right of first refusal.”

Yuba said it should have a chance to match the price that Dallhold Investments of Australia is paying for the gold dredging operation as it buys out Fluor’s interest in St. Joe Gold.

Irvine-based Fluor, however, contends that the joint venture with Yuba remains intact and that the refusal rights do not apply.

A Fluor spokesman said the gold produced by the Yuba Placer Gold operation never amounted to more than 5% of St. Joe Gold’s total annual gold production.

Jensen said that Yuba earlier this week applied for arbitration of the dispute and that the arbitration may extend beyond Oct. 31, the date by which Fluor hopes to complete the St. Joe Gold sale.

A Fluor spokesman said the company does not anticipate a delay in the sale.